JUDGMENT V.K. Mehrotra, J. - This bunch of writ petitions under Article 226 of the Constitution raises a common question which is whether the petitioners are liable to pay octroi duty on the goods brought by them for purposes of their factories situate within the limits of erstwhile Town Area Committee, Clutterbuckganj, Notified Area Committee, Izzatnagar and Gram Sabha of Revenue Village Paras Khera of District Bareilly in this State. These local areas were included within the limits of City of Bareilly constituted through notification No. 3313-A/XI-N.B-7-107/K-78, dated Nov. 13, 1981 issued under S. 3 of the U.P. Nagar Mahapalika Adhiniyam, 1959 (hereinafter, the Adhiniyam). 2. Municipal Board, Bareilly and in force within its limits octroi duty imposed by it in accordance with the provisions of the U.P. Municipalities Act, 1916 (briefly, the Act) on the date of the publication of the aforesaid notification in the U.P. Gazette (Extraordinary), namely, Nov. 13, 1981. Octroi duty was one of the taxes which could be imposed by a Municipal Board on account of S. 128 of the Act. No such duty was, however, in force within the limits of Town Area Committee, Clutterbuckganj, Notified Area Committee, Izzatnagar or Gram Sabha of Village Paras Khera. The petitioners were, naturally, not paying any duty on the goods brought by them to their factories situate within the limits of these local areas. When, after the declaration of the areas mentioned in the notification of Nov. 13, 1981 as a City under S. 3 of the Adhiniyam, which was to be called the Nagar Mahapalika for the city of Bareilly on account of S. 4 thereof, the petitioners were asked to pay octroi duty on these goods, the present petitions were filed in this court. The case of the petitioners is that there being no imposition of octroi duty, in accordance with the provisions of the Adhiniyam, in respect of the areas where their factories are situate, they could not be required to pay octroi on account of the mere inclusion of those areas within the city of Bareilly. It is their case that they could not be asked to pay octroi duty merely because such a duty had been imposed and was in force within the limits of Bareilly Municipal Board which too has been included within the limits of the City of Bareilly under the Notification. 3. It is their case that they could not be asked to pay octroi duty merely because such a duty had been imposed and was in force within the limits of Bareilly Municipal Board which too has been included within the limits of the City of Bareilly under the Notification. 3. The State of U.P. has filed a return in this Court in these petitions and so has the Nagar Mahapalika, Bareilly. Both of them have been arrayed as respondents in the petitions along with the District Magistrate, Bareilly. The stand taken by the respondents is that, inasmuch as, octroi duty was in force within the municipal limits of Bareilly, with which the other local areas were joined to constitute the Bareilly City, the same was to be treated as imposed with effect from Nov. 13, 1981 in all the areas which came to constitute the City of Bareilly under the Adhiniyam. No fresh imposition of octroi was necessary for the areas in which the factories of the petitioners are situate to render the petitioners liable for payment thereof. Some other averments were made in the returns which peed not be noticed as they relate to those pleas in the petitions in respect whereof no submission whatsoever was made by the learned counsel for the petitioners at the time of the hearing of these petitions. 4. Sarvasri S.N. Varma and Murlidhar Agarwal, Senior Advocates, have led the argument of behalf of the petitioners. Sri G. D. Srivastava, Senior Advocate has appeared for the Mahapalika while Sri Ram Prasad Singh, Additional Chief . Standing Counsel has made submissions before us on behalf of the State of Uttar Pradesh. The rival submissions are these: For the petitioners Upon constitution of Mahapalika for the City of Bareilly through the notification of Nov. 13, 1981 the pre-existing taxes in each local area, which was included in the City of Bareilly, survived in that area on account of S. 577(a) of the Adhiniyam, and. inasmuch as, there is no specific provision in the Adhiniyam for extension of the taxes imposed within the municipal limits of Bareilly to the other areas forming part of the City, unlike S. 5 of the U.P. Municipalities Act, Octroi could not be realised from the petitioners until it was imposed in accordance with the provisions of the Adhiniyam. inasmuch as, there is no specific provision in the Adhiniyam for extension of the taxes imposed within the municipal limits of Bareilly to the other areas forming part of the City, unlike S. 5 of the U.P. Municipalities Act, Octroi could not be realised from the petitioners until it was imposed in accordance with the provisions of the Adhiniyam. For the respondents It is implicit in S. 3 of the Adhiniyam that whenever limits of a City are altered by including therein some local areas, the taxes in force earlier to such extension in the municipal limits which has been extended shall be effective in the newly added local areas as well. Besides, S. 577 (a) of the Adhiniyam, properly construed, clearly suggested that the tax already imposed in a municipality would extend to the newly added local areas where no similar tax was pre-existing. Absence of a specific provision like S. 5 of the U.P. Municipalities Act in the Adhiniyam was not material at all. Since, admittedly, octroi duty was in force in the limits of Bareilly Municipality and no such duty was in force in the other areas in question, its extension to the these areas, after their inclusion within the limits of Bareilly city must be read by necessary implication. 5. We may now read the relevant provisions of the Adhiniyam. S. 2. Definitions in this Act unless there be something repugnant in the subject or context (10) "City" means any local area constituted to be a City under S. 3." S. 3. Declaration of local areas to be cities for purposes of the Act. (1) The State Government may from time to time by notification in the official Gazette constitute any local area lying within such limits as are specified in the notification to be a City by such name as it may specify. (2) The State Government may also from time to time, after consultation with the Mahapalika, by notification in the official Gazette alter the limits specified for any City under sub-s. (1) so as to include therein or to exclude therefrom, such area as may be specified. (3) The power to issue a notification under this section shall be subject to the condition of previous publication. section 4. Mahapalika for every City. (3) The power to issue a notification under this section shall be subject to the condition of previous publication. section 4. Mahapalika for every City. For every City there shall be a Mahapalika which shall, by the name of "The Nagar Mahapalika of the City of .......... (name of the City)" be a body corporate and have perpetual succession and a common seal and by such name may sue and be sued. S. 172. Taxes to be imposed under this Act. (1) For the purposes of this Act and subject to the provisions thereof and of Article 285 of the Constitution of India the Mahapalika shall impose the following taxes, namely- (a) property taxes, (b) a tax on vehicles other than mechanically propelled vehicles, and other conveyances plying for hire or kept within the City or on boats moored therein, (c) A tax on animals used for riding, driving, draught or burden, when kept within the City. (2) In addition to the taxes specified in sub-sec. (1) the Mahapaplika may for the purposes of this Act and subject to the provisions thereof impose any of the following taxes, namely,- (a) ...................... (b) an octroi on goods or animals brought within the City for consumption, use or sale therein,- ..... .... .... .... (3) The Mahapalika taxes shall be assessed and levied in accordance with the provisions of this Act and the rules and bye-laws framed thereunder. (4) Nothing in this section shall authorise the imposition of any tax which the State Legislature has no power to impose in the State under the Constitution of India: Provided that where any tax was being lawfully levied in the area included in the City immediately before the commencement of the Constitution of India such tax may continue to be levied and applied for the purposes of this Act until provision to the contrary is made by Parliament, Chapter XXV - Transitory provisions, Repeals and Amendments. S. 577. Continuation of appointments, taxes, budget estimate, assessments etc. Save as expressly provided by the provisions of this Chapter or by a notification issued under S. 579- (a) Any appointment, delegation. S. 577. Continuation of appointments, taxes, budget estimate, assessments etc. Save as expressly provided by the provisions of this Chapter or by a notification issued under S. 579- (a) Any appointment, delegation. notification, notice, tax, order, direction, scheme, licence, permission, registration rule, bye-law, regulation, form made, issued, imposed or granted under the U.P. Municipalities Act, 1916, or the Cawnpore Urban Area Development Act, 1945 or the U. P. Town Improvement Act, 1919 or any other law in force in any local area constituted to be a City immediately before the appointed day shall, in so far as is not inconsistent with the provisions of this Act. continue in force until it is superseded by any appointment, delegation, notification, notice, tax, order. direction, scheme, licence, permission, registration, rule, bye-law, or form made, issued, imposed, or granted under this Act or any other law as aforesaid, as the case may be, ...... ...... ....... ..... (c) All proceedings for acquisition of land whether in pursuance of any scheme of improvement or otherwise initiated under the U.P. Town Improvement Act, 1919, the Cawnpore Urban Area Development Act, 1945 or the U.P. Municipalities Act, 1916, or any other enactment applicable to the area included in the City may be continued as if they had been initiated under this Act, (d) all budget estimates, assessments, valuations, measurements, and divisions made under the U.P. Municipalities Act 1916, or the U.P. Town Improvement Act, 1919, or the Cawnpore Urban Area Development Act, 1945 or any other law in force in any area constituted to be a City immediately before the appointed day shall, in so far as they are consistent with the provisions of this Act, be deemed to have been made under this Act, ..... ..... .... ......... We may also read some provisions of the U.P. Municipalities Act, 1916 : S. 3. Declaration and definition of Municipalities and Cities. (1) The State Government may by notification- (a) declare any local area to be a municipality, (b) declare any Municipality having a population of less than 1,00,000 inhabitants to be a city, (c) define the limits of any Municipality, (d) include or exclude any area in or from any Municipality, and (e) cancel any notification under any of the preceding clauses. 2. 2. The power to issue a notification tinder sub-section (1) shall be subject to the condition of the notification being issued after the previous publication required by S. 4 and notwithstanding anything in this section, no area which is, or is par( of. a cantonment, shall be declared to be a Municipality or be included in a Municipality under this section." S. 5. Effect of including area in Municipality - When by reason of a notification under S. 3 any local area is included in a Municipality, such area shall thereby become subject to all notifications, rules, regulations, bye-laws, orders, directions, issued or made under this or any other enactment and in force throughout the Municipality at the time immediately preceding the inclusion of the area. S. 128. Taxes which may be imposed- (1) Subject to any general rules or special orders of the State Government in this behalf, the taxes which a board may impose in the whole or part of a municipality are (viii) an octroi on goods or animals brought within the municipality for consumption, use or sale therein, S. 333A. Consequence of establishment of a municipality in place of town area or notified area. Where a municipality is created in place of a town area or notified area, the following consequences shall, notwithstanding anything contained in S. 34 of the Town Areas Act, 1914 (U. P. Act II of 1914), or S. 339 of this Act, follow as from the date of the creation of the municipality, (i) all taxes, fees, licences, fines or penalties imposed, prescribed or levied, on the date immediately preceding the said date, by the Town Area Committee or the Notified area Committee, as the case may be, be deemed to have been imposed, prescribed or levied by the board under or in accordance with the provision of this Act and shall, until modified or changed continue to be so realizable: ....................... (v) the fund of the town area or the notified area and all the proceeds of any unexpended taxes, tolls, fees or fines, levied or realised, as the case may be, by Town Area Committee or the Notified Area Committee shall be transferred to and form part of the municipal fund of the municipality." 6. The notification of Nov. (v) the fund of the town area or the notified area and all the proceeds of any unexpended taxes, tolls, fees or fines, levied or realised, as the case may be, by Town Area Committee or the Notified Area Committee shall be transferred to and form part of the municipal fund of the municipality." 6. The notification of Nov. 13, 1981 constitutes the local areas mentioned in the Schedule appended to it to be "the City of Bareilly" as is clear from its opening part which runs as under : "In exercise of powers under S. 3 of the Pradesh Nagar Mahapalika Adhiniyam, 59, the Governor is pleased to constitute local area lying within the limits specified in the Schedule appended herewith to be the City of Bareilly with effect from the date of publication of this notification in the Gazette. Schedule Limits of City of Bareilly. Limits of Nagar Mahapalika, Bareilly consist of the areas which are included in the limits of Bareilly Municipal Board, the Town Area Committee of Clutterbuckganj, Bareilly, Notified Area Committee of Izzatnagar, Bareilly and Gram Sabhas of Revenue villages of....... Parsa Khera........." 7. By this notification the City of Directly (or the Bareilly Mahapalika) was constituted for the first time within the earning of S. 3 (1) of the Adhiniyam. It, admittedly, is not a case of alteration of the its of the City of Bareilly by inclusion of areas therein as contemplated by sub-f2). It is obvious that the taxes which re in force in a particular area which came to be included within the limits of the of Bareilly as constituted by this notification were to operate within the defines of the erstwhile limits of that local until superseded by a tax imposed under the Adhiniyam in view of sub-sec. (a) of the S. 57 of the Adhiniyam. A reading of ids sub-section makes it clear that it only preserves, as it were, the status quo in regard, amongst others, to the taxes actually in force in each local area which came to be included within the areas constituted to be a City until a change is made therein under the provisions of the Adhiniyam. A reading of ids sub-section makes it clear that it only preserves, as it were, the status quo in regard, amongst others, to the taxes actually in force in each local area which came to be included within the areas constituted to be a City until a change is made therein under the provisions of the Adhiniyam. Thus viewed the provision cannot be construed, suggested on behalf of the respondents, enable realisation of octroi for entry of goods into the erstwhile local areas where ere existed no such tax prior to the constitution of the City. 8. The submission that it is inherent in the inclusion of a local area within the limits of a City that the pre-existing tax in the city area shall stand extended to the newly added areas need not be seriously considered by us in the present case. The submission of the Addl. Chief Standing Counsel that such an extension of pre-existing taxes may be read by necessary implication in cases of extension of the limits of the City by adding further areas to it, though prima facie attractive, is not really correct. When the Adhiniyam was enacted by the U.P. Legislature, it had before it an earlier legislation in the form of the U.P. Municipalities Act which provided for such a contingency in S. 5. Yet, it did not enact a similar provision in the Adhiniyam. Besides, the Supreme Court has laid down in Bagalkot City Municipality v. Bagalkot Cement Co., AIR 1963 SC 771 , by majority, that before the applicability of pre-existing taxes in the newly added areas of the municipality is upheld, it must be referable to some provision in the Statute. To borrow the words of Sarkar, J., who spoke for the majority (at p. 774) : "........ Let us however assume that it was intended that the existing bye-laws would apply to the added areas without fresh re-enactment. If such was the intention, that intention must necessarily be referable to some provision in the Act. To borrow the words of Sarkar, J., who spoke for the majority (at p. 774) : "........ Let us however assume that it was intended that the existing bye-laws would apply to the added areas without fresh re-enactment. If such was the intention, that intention must necessarily be referable to some provision in the Act. In such a case it would be because of that provision of the Act that the bye-laws would be affecting people to whom they had not before their making been published and not by their own terms or force....." The minority view expressed by Raghubar Dayal, J., however, does support the submission that extension of the limits of the Municipal Board would connote that the area newly added to the municipal limits comes not only under the control of the Municipality but also becomes subject to such laws, rules and bye-laws which may be in force within the municipal limits. 9. But, as we have said earlier, such is not the situation in the instant case where the City of Bareilly has been constituted for the first time under S. 3 (1) of the Adhiniyam and not that the limits of any pre-existing City have been altered by adding new areas to it. 10. What then is ultimate result of this discussion? It, clearly, is that unless there is imposition of octroi afresh in the areas in which the factories of the petitioners are situate, in accordance with the provisions of the Adhiniyam, they shall not be liable to its payment upon the goods brought by them within the erstwhile limits of those areas. That is the inevitable result of the statutory provisions as they stand today. And, in the view that we have taken, the respondents cannot require the petitioners to pay octroi duty on the goods brought by them to their factories by the mere reason of the inclusion of the local area of the erstwhile Town Area Committee, Clutterbuckganj, Notified Area Committee, Izaatnagar and Gram Sabha of revenue village Parsa Khera of district Bareilly, in the area constituted to be `City of Bareilly.' 11. The petitions, therefore, succeed. The respondents are restrained from realising from the petitioners any octroi duty on the goods brought by the petitioners for their factories within the limits of the aforesaid erstwhile local areas. The parties shall, however, bear their own costs.